Definition of a Regional Operating Headquarters (ROHQ) in the Philippines
A regional operating headquarters, or ROHQ for short, is defined by Republic Act 8756 as a foreign business entity that may source its income in the Philippines through the execution of qualifying services to its affiliates, branches, or subsidiaries in the Philippines, the Asia-Pacific region and other foreign markets.
Many might confuse ROHQ with RHQ. A regional or area headquarters (RHQ)’s main objective is to be a multinational firm’s administrative branch. Its main functions include providing communication, coordination, and administration to its affiliates, branches, or subsidiaries in Asia-Pacific and other foreign markets. It is not allowed to earn income in the Philippines.
A regional operating headquarters (ROHQ) may engage in any of the following qualifying services:
- Business development
- Corporate finance advisory services
- Data processing and communication
- General administration and planning
- Logistics services
- Marketing control and sales promotion
- Research development services and product development
- Sourcing/procurement of raw materials and components
- Training and personnel management
- Technical support and maintenance
An ROHQ is prohibited to:
- Offer qualifying services to entities other than their affiliates, branches, and subsidiaries, as stated in their registration with the Securities and Exchange Commission (SEC)
- Directly and indirectly solicit or market goods and services, whether on behalf of their parent company, affiliates, branches, subsidiaries, or any other company.
Minimum Capital Requirements of an ROHQ in the Philippines
The parent company of the ROHQ located in the Philippines is required to deposit an initial inward remittance of the Philippine Peso equivalent of US$200,000 for its capital and as an annual provision for the operational costs of the Philippine ROHQ.
Tax Duties of an ROHQ in the Philippines
The taxable income of an ROHQ is subject to a tax rate of ten percent as stated under the National Internal Revenue Code (NIRC), as amended by Republic Act 8424, as long as the income sourced from the Philippines by the ROHQ that will be remitted to the parent company is subject to the tax on branch profit remittance as stated in Section 28(a, 5) of the NIRC.
Incentives for Foreign Personnel of ROHQ in the Philippines
- Travel tax exemption
- Multiple entry visa for ROHQ’s foreign personnel, their respective spouses, and their unmarried children under 21 years of age if they are escorting them or plans to join them after their admission into the Philippines as a non-immigrant
- Tax and duty-free importation of personal and household effects of their respective alien executives
- Tax and duty-free importation of equipment and materials for training and conferences which are used solely for their functions as ROHQs and which are not locally available subject to the prior approval of the Board of Investments
- Withholding tax of fifteen percent (15%) on compensation income
- Exemption from the payment of all fees due under the immigration and alien registration laws, acquisition of alien certificates of registration and securing emigration clearance certificates, and all types of clearances imposed by any government department or agency
- Exemption from all kinds of local taxes, fees, or charges required by local government units except for real property tax on land improvements and equipment
Registration Requirements for ROHQ in the Philippines
- Application Form
- Audited financial statements of the parent company proving its financial solvency
- Board Resolution allowing the establishment of the ROHQ in the Philippines
- Certified copies Of the Articles of Incorporation and By-Laws
- Certification from the governing agency of the parent company’s country of origin stating that the firm is engaged in international trade with affiliates, branch offices, or subsidiaries in the Asia-Pacific region and other foreign markers
- Clearance from appropriate government agencies, if applicable
- Endorsement from the Board of Investments (BOI)
- Proof of inward remittance of the Philippine Peso equivalent of US$200,000 for the ROHQ
How to Register an ROHQ in the Philippines
- Check availability and reserve your business name at the Securities and Exchange Commission (SEC).
- Provide documentary requirements to SEC for assessment and processing.
- Submit local bank proof of inward remittance.
- Present BOI endorsement.
- Pay the dues.
- Obtain a Certificate of Registration from SEC’s records division.
- Acquire a barangay clearance, a mayor’s permit, and a business permit to operate.
- Register with the BIR to secure BIR’s Certificate of Registration, CRM or POS, and Certificate of Registration of Books of Accounts.
- Complete employer registration with BIR, Pag-Ibig, Philhealth, and SSS.
- Ensure foreign directors, executives, and employees apply for work visas.
Start Setting up an ROHQ in the Philippines
Foreign enterprises needing efficient help starting their regional operating headquarters in the Philippines may call Triple i Consulting for reliable assistance.
Triple i is the first ISO 9001:2008 company to deliver business registration services to companies in the Philippines. With more than ten years of processing government documents, securing business certificates, and providing business consulting services, the company offers the following services connected with starting a regional operating headquarters in the Philippines:
Schedule a free initial consultation with one of our ROHQ business registration experts, please contact us through any of the following methods: